The onset of the spring moving season generally leads to more ambitious pricing of properties coming to market, partly due to estate agents vying for new seller instructions.
However, this February’s 4.1% (£9,192) increase is the highest monthly rise Rightmove has recorded since April 2002, a surprisingly strong uplift given the challenging economic environment.
In part this is fuelled by the cash-rich sectors of the market where buyer demand is exceeding suitable property supply, though there is also evidence of increasing housing market confidence. After four years of constant economic uncertainty, it seems some property consumers have accepted current market conditions as the new norm.
Miles Shipside, director at Rightmove comments: “We’re seeing a strong ‘spring bounce’ in asking prices this year, but the ball is still a lot smaller than it was before the credit crunch as market volumes are constrained. The biggest jump in new sellers’ asking prices for nearly ten years indicates there is pricing power if you are selling the right type of property in the right place where enough potential buyers have access to funding. If your local market does not have those characteristics and your price-pump is based on little more than seasonal optimism and an estate agent’s hot air, then be prepared for buyer response to be a let-down.
“However, there are also indications that those who are able to buy but had previously lacked the confidence to take the plunge are of a more positive mindset this year. Perhaps some people are adjusting to the realities, opportunities and strange normality of a low volume but apparently stable property market”.
Record January search activity on Rightmove indicates a pent-up desire to move that out-weighs the uncertain economic outlook. With sales transaction numbers having been depressed for the last four years, many households will have a pressing need to move, and some of those that are able to do so seem to be springing back to life.
Shipside comments: “Search activity on Rightmove is up by 19% on January 2011, and it could be a sign that some of those who can afford to move have decided to get on with their lives, driven either by desperation or by coming to terms with the constant barrage of negative economic news being the new norm. You can get tired of gloomy news, or get used to it, and indeed for some cash-rich buyers life has moved on to such an extent that it’s like the Lehman Brothers collapse never happened”.Source: propertytalk Live!